MAHENDRA KUMAR SANGHI Vs. RATAN KUMAR SANGHI

JUDGEMENT

(1.) BOTH the special appeals under sec. 18 of the Rajasthan High Court Ordinance are directed against the judgment of the learned Company Judge dated 5/6. 9. 94 where by the learned Judge sanctioned the purported scheme of reconstruction - cum - family arrangement of Western Indian States Motors Ltd. the original respondent No. 1 (hereinafter referred to as the Company ). The grievance of the appellant inter alia in D. B. Special Appeal No. 30/94 is that the learned Company Judge by the impugned order has passed the order in terms of the compromise as is being done in a suit without satisfying that the interest of all the parties concerned i. e. the Company, its employees, share- holders and creditors was taken care of. In another appeal being D. B. Special Appeal No. 24/94, the grievance of the appellant Smt. Rajani Sanghi inter alia is that the Company Petition filed by her as a share-holder and creditor being Company Petition No. 2/92 and 3/92 were directed to be heard along with the Company Petition No. 6/86, still the learned Company Judge disposed of the Company Petition irrespective of the fact that both the company petitions were not listed and they were not on board. It is also submitted that her deceased husband Ashok Kumar Sanghi who was third respondent in the Company Petition died on 1. 2. 90 but without taking his legal representatives on record the Company Petition was disposed of. She also filed an application along with her minor daughter Meenakshi for impleading her a party, but the same was erroneously rejected by the learned Company Judge. Thus, the impugned order sanctioning the scheme of reconstruction has been passed at her back in violation of principles of natural justice. The another significant development during the pendency of the special appeal is that while on 2. 3. 2000 the sixth respondent Vijay Kumar Sanghi filed an application to transpose him as second appellant. On 4. 11. 2000 appellant Mahendra Kumar Sanghi has filed an application seeking permission to withdraw the appeal. There is resistance by the respondent No. 6 Vijay Kumar Sanghi in the matter of grant of permission to withdraw the appeal. It is submitted in alternate that he may be substituted as appellant in place of M. K. Sanghi.

(2.) BRIEFLY stated the facts of the case are, thus: The first respondent, the Western Indian States Motors Ltd. is a public limited company. The share capital of the Company Rs. 25 Lacs is divided into equity shares of Rs. 1000/- equity shares of Rs. 1000/- each. In the year 1985, Company allotted company's shares to its existing share-holders in the ratio of 2:1. Thus, the Company has issued and allotted 5000 equity shares as bonus shares to its share-holders, raising the paid up capital of the Company to Rs. 15 Lacs. though it is a public limited Company as such the family pedigree is not relevant, still the fact remains that all the shares are held by members of the Sanghi Family i. e. the petitioner and the respondents No. 2 to 5 (in the Original Company petition and their family members) Thus, it would be convenient to acquaint with the family pedigree, which is given as follows:- Moti Lal Sanghi Died 1960 N. K. Sanghi (Raj.) Died 1984 Smt. Uma Sanghi R. 2. A. K. Sanghi (Delhi) R. K. Sanghi Wife Smt. Pushpa (petitioner in Company Petition) M. K. Sanghi (Bom.) R. 4 Appellant Vijay Sanghi R. 5 Ajay Sanghi Ashok Died 1. 2. 90 Wife Rajni R. 3 Akshaya Wife Rachana

(3.) THE fourth respondent Shri Mahendra Kumar Sanghi filed an appeal against the order of the learned Company Judge sanctioning the purported scheme of reconstruction cum family arrangements of the Company inter alia on the ground that a petition under Section 397 and 398 of the Companies Act could not be compromised merely at the will of even all the parties thereto (unlike a suit) without the court being satisfied that the compromise was in best interest of the Company. According to appellant the company had several outstanding and large liabilities including claims from Rajasthan Industrial Corporation Ltd. (Rs. 30 Lacs) and a suit filed by the Indian Overseas Bank (over Rs. 25 Lacs), liabilities of the Income-tax Department, Provident Fund Commissioner etc. An allegation has also been made that the assets of the Company have been sought to be siphoned away and taken out of the reach of its creditors by the device of the "scheme for reconstruction" at a gross under valuation. It is submitted that the property sought to be transferred at Jaipur is the subject of equitable mortgage in favour of the Oriental Bank of Commerce in respect of which the said Bank of Commerce in respect of which the said Bank has filed a suit for recovery of mortgaged debt exceeding Rs. 1 Crore and the sale of the property for the recovery thereof and in respect of which debt of the Company the appellant has given a personal guarantee to the Bank and as such the bank and appellant ought to have been given opportunity of being heard before recording the scheme for reconstruction by the learned Company Judge. THE appellant has also filed an application under Order 41 Rule 27 C. P. C. seeking certain documents to be placed on record. Some legal grounds have also been raised to the effect that as per the requirement of Section 391 the learned Company Judge was required to direct to convene the meeting of the share-holders and the creditors before sanctioning the scheme. Objection has been filed by the original petitioner Shri Rajendra Kumar Sanghi with respect to the maintainability of the appeal. It is averred therein the similar settlement was done before the Bombay High Court in a Company Petition No. 128/85 with regard to other concern Sanghi Motors (Bombay Pvt. Ltd. , Bombay ). THEre also shares were transferred by Shri R. K. Sanghi and his family members in favour of the appellant Shri M. K. Sanghi and his family members in lieu thereof the property of the Company mentioned in Para 3 of the Scheme of Reconstruction was transferred on its book value which was far less than the market value. however, the appellant did not raise any objection in the said proceedings because he was beneficiary of the scheme of reconstruction. THEre also no notice was given to other parties including the fourth respondent. Averments have been made with respect to certain payments to the creditors.